Indian stock markets are among the oldest
in Asia, with a history dating back
to almost over two
hundred years ago. In those days, the
East India Company was the dominant institution and the earliest
records of
security dealings are meager and obscure.
In Delhi,
two stock exchanges – Delhi Stock and Share Brokers’ Association,
Limited and
the Delhi Stocks and Shares Exchange, Limited – were created, and in
1947, they
joined forces, creating the Delhi Stock Exchange Association, Limited. The Delhi Stock Exchange Association, Ltd. Is
one of the premier stock exchanges in India.
Throughout Northern India, the
Delhi Stock Exchange has terminals in more than fifty
cities.
Trading in Indian stock exchanges is really
limited to
listed securities of public limited companies.
They are divided broadly into specified securities and
non-specified
securities. Two types of transactions
can be carried out on the Indian stock exchange: spot delivery
transactions and
forward transactions. The latter is only
permitted in the case of specified shares.
Brokers who carry over the outstanding pay carryover charges,
which are
usually determined by prevailing rates of interest.
In an Indian stock exchange, like the Delhi Stock
Exchange,
a member broker can act as an agent, buy and sell for his client on a
commission basis, and can also act as a trader or dealer as a
principal, buy
and sell securities on his own account and risk. This
is in great contrast with the practice
prevailing on New York and London
exchanges, where a member can act as a
broker only.
Some of the more notable features of the Delhi
Stock
Exchange are a modified “carry forward” system, a trade guarantee fund
that
guarantees all transactions through the exchange (in which, should a
member
fail to honor his settlement commitment, the Trade Guarantee Fund
undertakes to
fulfill that commitment and complete the settlement without any
disruption), a
shortened settlement cycle of specified shares, dematerialized trading,
and a
unified mode of settlement of trades.
The nature of trading on the Delhi Stock Exchange
is that of
age-old, conventional style face-to-face trading, complete with bids
and offers
being made by open cry. There is,
however, a great effort to modernize the Indian stock exchange in very
recent
times.
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